ERHC Energy Inc (ERHE)

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Nigeria, Sao Tome Oil Pacts Seen Before Christmas
by Vincent Nwanma
Wed, Nov 30, 2005 16:40 GMT

LAGOS - Production sharing contracts and joint operating agreements in the oil blocks located in the Nigerian-Sao Tome Joint Development Zone will be signed before Christmas, a Nigerian government source told Dow Jones Newswires Wednesday.

The source also said that the Joint Development Authority, which manages resources in the maritime boundary shared between the two countries, has approved "in principle" Swiss energy company Addax Petroleum's role as operator of block 4 in the zone.

"The agreements will be signed sometime in December, possibly before Christmas. We are hoping so," the source said.

Addax, which already has operations in Nigeria, replaced Houston-based Noble Energy Inc. (NBL) after it withdrew this year from a consortium led by ERHC Energy Inc. (ERHE).

"Addax is almost there," the source said. "We have given an approval in principle, but we need certain clearance from the Sao Tomean end."

The JDA made the latest block awards last May, with blocks 2 to 6 being offered to a different consortium made up of local and international oil companies.

Since then, negotiations have been made on joint operating agreements among the consortia members.

The groups have also been negotiating with the JDA on the terms for the production sharing contract, under which the blocks will be operated.

All the agreements are subject to approval by the Joint Ministerial Council, the highest ruling organ of the JDZ, made up of ministers from the two countries.

© 2005 Dow Jones Newswires.
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